The present application is related to the following commonly-owned, co-pending U.S. patent applications:
U.S. patent application Ser. No. 09/166,339 (Attorney Docket No. 98-059), entitled METHOD AND APPRATUS FOR MAINTAINING A CUSTOMER DATABASE USING LICENSE PLATE SCANNING, filed on Oct. 5, 1998, which is incorporated by reference herein as part of the present disclosure.
1. Field of the Invention
The present invention relates to point-of-sale systems, and more specifically to methods and systems for determining and applying discounts through point-of-sale systems.
2. Background of the Invention
In most areas of business several entities compete for the same set of potential customers. Consequently, each business must aggressively pursue marketing strategies to attract customers and induce customer loyalty to their particular establishment. For example, the grocery store industry is highly competitive. There are approximately seventy-five large supermarket chains in the United States. In an attempt to attract customers, members of the grocery store industry have employed a number of different promotions such as frequent shopper programs and weekly coupon specials. Despite these efforts, however, customer loyalty is no longer inherent due to the intense competition.
Conventional methods of attracting and developing customer loyalty to a supermarket chain include television and radio advertising to promote particular stores. In addition, some stores offer free standing inserts (FSIs), coupons, and loss leaders in order to attract consumers. These methods, however, erode the gross margin of the stores without retaining the stores"" best customers. Furthermore, weekly-advertised specials and coupons by their very nature only attract customers for a particular time period. Since the specials or discounts typically vary from week to week, there is no guarantee or likelihood that a store will be discounting exactly what the customer is interested in buying every grocery trip. Most customers, therefore, scan the weekly advertisement of every grocery store in their area before doing their weekly grocery shopping and choose to go to the store that most meets their needs. Hence, the customer is not loyal to a single store or chain of stores.
Another attempt to attract customers is the implementation of a frequent shopper program. Such a program typically provides a customer with a frequent shopper card that is to be presented at the time of a transaction. Presentation of the card identifies the customer and enables the customer to receive preferential treatment, such as discounts on specific items purchased. Essentially, these frequent shopper programs act much like a paperless coupon redemption system. The frequent shopper programs are also used by the business to track a customer""s shopping habits. The frequent shopper card includes a customer identifier that enables the retailer to identify, record and track a customer""s purchases. The customer""s shopping history may then be used to perform targeted marketing functions, such as compiling mailing lists of recipients of advertising material or printing out point-of-sale (POS) coupons for the customer.
While the frequent shopper program may succeed in attracting the customer to the store on an occasional basis, the program does not successfully ensure the loyalty of the customers. Since many stores have a frequent shopper program, customers may simply acquire a frequent shopper card for every chain of stores in their area and make purchases at the chain that offers the best specials or is the most convenient at any particular time. Accordingly, a frequent shopper program does not provide any incentive (i.e. reward or penalty) for visiting the store on a consistent basis.
A further drawback of the prior art frequent shopper systems is their failure to identify and reward their most frequent and loyal customers over and above less frequent or loyal customers. For example, grocery stores make approximately eighty percent of their revenue from only about thirty percent of their customers. It would therefore be beneficial for the grocery stores to reward and retain as many of the xe2x80x9cthirty percentxe2x80x9d customers as possible.
Some businesses employ reward programs in order to attract and develop customer loyalty. An example of a typical reward program is one implemented by Arby""s, a fast-food chain. The Arby""s reward program enables customers to earn prizes that increase in value through a series of sixteen visits, after which the prizes revert to their minimal value and the cycle repeats. Once the maximum prize value is achieved, however, the customer""s account is xe2x80x9cresetxe2x80x9d, thus eliminating the customer""s incentive to continue choosing Arby""s over another fast-food chain. In addition, the Arby""s reward program does not promote frequent visits, since there is no time requirement within which the sixteen visits must be made. Thus, the benefits, if any, may be spread over a substantial amount of time.
With the considerable number of businesses in any given area, there exists a need for systems and processes which provide a given business with the ability to reward a particularly loyal customer for consistent patronage to their establishment and to promote and reinforce the customer""s loyalty.
It is an object of the present invention to provide a method and system for determining a discount for a customer based on whether the customer has met certain predetermined conditions.
Generally, according to one aspect of the present invention, a POS controller receives data representing a transaction and a customer identifier that identifies a customer that is associated with the transaction. The customer identifier may be, for example, in the form of (i) an alphanumeric identifier stored on a frequent shopper card, (ii) a credit, debit or smart card account number, (iii) an EZ pass, (iv) a biometric, or (v) a license plate number. The POS controller may receive the transaction data and the customer identifier from a POS terminal when the customer is participating in the transaction. Alternately, the POS controller may receive the transaction data and customer identifier from a database or from previous transactions.
The POS controller in turn determines a customer rating for the customer. The customer rating may be based on the transaction data or may be retrieved from memory based on the customer identifier. The POS controller also retrieves the customer""s current discount (i.e. a discount that has not yet been affected by the transaction). The POS controller then determines an updated discount based on the current discount and the customer rating. Generally, the updated discount is greater than the current discount if the customer has participated in a qualifying transaction within a predetermined time period. The updated discount is generally less than the customer discount if the customer has not participated in a qualifying transaction within a predetermined time period.
The discount may be decreased by a predefined decrement (e.g., 1.0%) or decreased down to zero (0%). Different decrements may be associated with different customer ratings. The POS controller stores the updated discount in association with the customer identifier. The POS controller may further communicate the updated discount to a POS terminal which applies the updated discount to the customer""s current transaction.
The determination of the customer rating may be based on (i) the transaction price of one or more transactions; (ii) the products included in one or more transactions; and/or (iii) the time since the customer""s last transaction at the business. The determination of the customer rating may affect (i) the discount increment from the current discount to an updated discount; (ii) the maximum discount allowed; (iii) the length of the grace period, before the current discount is decreased; and/or (iv) the transaction frequency requirement, i.e. the maximum length of time between customer transactions in order to qualify for an increased discount.